ACC's Crash Hurts Financially, Too

Depressed about the weekend collapse of your NCAA Tournament bracket?

Here's some consolation: When you lose games, it doesn't cost you millions.

After getting a national-best seven bids to the Big Dance, the ACC had only North Carolina advance beyond the opening weekend. Duke and Georgia Tech fell in the first round. Boston College, Maryland, Virginia and Virginia Tech lost in the second round. With a 6-6 NCAA mark heading into the Sweet 16, the ACC is in jeopardy of posting just its second losing record (along with 1987) since the rules were changed in 1980 to allow unlimited bids per conference.

Still hurting? Consider this:

In typical office pools, the most fans can lose is a small entry fee and perhaps some personal glory. In the ACC's version of March Madness, the pride factor certainly took a beating this year, and every defeat cost the conference (over time) about a $1 million payday, too.

“The first thing you think about on Selection Sunday is, you want your conference and your individual schools to be rewarded for a great season,” ACC commissioner John Swofford said at the ACC Tournament. “We thought we had nine teams that were worthy of the NCAA Tournament this year. You want those teams that have earned it on the court to have an opportunity to compete for the championship.

“There’s obviously a money element to it, too. That’s certainly a part of it.”

Under the revenue distribution system adopted by the NCAA in the early 1990s, a significant portion (about 40 percent) of the payouts to individual schools and conferences is determined by the performance of that school/conference in the NCAA Tournament over the most recent six-year period.

For example, the check the ACC will receive from the NCAA this year will reflect the league’s performance in the NCAA Tournament from 2001-06. The 2008 check will be based on the number of “money units” accumulated from 2002-07. The 2013 check will reflect the results from 2007-12.

Each conference — or, in the case of independents, each school — earns one “money unit” for every game played in a given year’s tournament. Exception: No units are credited for playing in the title game.

The ACC didn’t get nine NCAA invitations this year, but it did receive seven — three more than last year, and one more than at any time in the 54-year history of the conference. As the league champion, UNC gained an automatic bid. Boston College, Duke, Georgia Tech, Maryland, Virginia and Virginia Tech received at-large NCAA invitations.

Last year, with a disappointing four NCAA bids and just six victories, the ACC earned only 10 “money units.” This year, pending UNC's results moving forward, the ACC stands at 13 (seven bids, six wins) units. Those results fall far short of the league’s performance in 2004, when six NCAA participants earned 19 units.

Some good news: The ACC’s average performance over the last six seasons is about 14 units, the highest number in the nation, and the Tar Heels still could push this year's number as high as 15.

The NCAA’s move to the revolving, six-year revenue distribution formula was designed in part to lessen the impact of individual games. Because of image- and gambling-related concerns, NCAA administrators did not want to read articles about how a missed free throw in the final seconds cost a particular conference or school truckloads of cash.

In reality, though, the dreaded “million-dollar free throw” concept remains alive and well. Two years ago, a single money unit was worth $152,037. Last year, the number was about $164,000. Assuming more (small) increases in future years, and remembering that each of this year’s “units” will remain in the distribution formula through 2013, the “million-dollar free throw” label appears to be a perfect fit.

Keep in mind that all NCAA Tournament money issues revolve around the NCAA’s landmark 11-year, $6 billion contract with CBS. (Yes, that’s “billion,” with a “b.”) That deal runs through 2013, when CBS is scheduled to pay $764 million to televise the event. Last year’s fee was $453 million.

For some perspective, consider that the NCAA’s 11-year agreement with ESPN for the broadcast rights to the championships in 20 other Division I sports is worth $200 million. That’s about $18.2 million per year for all 20 sports, versus an average of about $545 million per year for men’s basketball alone.

In addition to the winning-based formula above, the NCAA keeps much of the NCAA Tournament revenue to sustain itself. Last year, it distributed about $165 million in other cash to member schools according to other (unrelated to winning) formulas.

ACC In The NCAA Tournament
Year -- "Money Units"

2007 -- 13 (with UNC still alive)
2006 -- 10
2005 -- 16
2004 -- 19
2003 -- 9
2002 -- 13
2001 -- 16